Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

SK Innovation: Rights Offering of 1.2 Trillion Won at a 21% Discount to Current Price

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<ul>
<li>We should seize the arbitrage trading opportunities between SSF and subscription rights during the rights trading window. SK Innovation's SSF is highly liquid, being traded at nearly 0.5x spot.</li>
<li>The key is to catch the timing of basis widening. SK Innovation traditionally experiences significant intraday basis fluctuations, making it a crucial factor in maximizing our profitability.</li>
<li>The ex-date play, betting on the tendency for prices to close above the base price on the ex-date, may not hold significant appeal. This pattern has become less pronounced recently.</li>
</ul>


We should seize the arbitrage trading opportunities between SSF and subscription rights during the rights trading window. SK Innovation's SSF is highly liquid, being traded at nearly 0.5x spot.
The key is to catch the timing of basis widening. SK Innovation traditionally experiences significant intraday basis fluctuations, making it a crucial factor in maximizing our profitability.
The ex-date play, betting on the tendency for prices to close above the base price on the ex-date, may not hold significant appeal. This pattern has become less pronounced recently.


What Arb Trading Opportunities Should We Target in SK Innovation's Rights Offering?